Are downtown apartment occupancy rapidly trending down?

Issues concerning Downtown as described by the Downtown Council. River to 31st Street, I-35 to Bruce R. Watkins.
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normalthings
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Re: Are downtown apartment occupancy rapidly trending down?

Post by normalthings »

At one time the loft/refurb & conversion market hit a peak and people thought the downtown renaissance was over.

Then new builds such as One Light started up and a whole new market not previously extistent in KC opened up. The market overall continues to grow and downtown flowered.

Now that new build apartments seem to be peaking, could we be at the cusp of the third phase - condo renovation or new builds ?

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wahoowa
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Re: Are downtown apartment occupancy rapidly trending down?

Post by wahoowa »

i've heard a lot (comparatively, which is to say a non-zero amount) about expiring low-income options. i wonder if any of those will be ripe for condo conversions if the credits that create the incentive to be a low-income option expire or fade away?

i suppose it would also be interesting if something like the board of trade or 909 walnut buildings start to offer/market some of their rental units as condos again, which i believe was formerly the case at both locations. but i'm not sure what factors would make the dollars line up for them to want to make such a move.

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taxi
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Re: Are downtown apartment occupancy rapidly trending down?

Post by taxi »

wahoowa wrote:
Tue Dec 11, 2018 8:37 pm
but i'm not sure what factors would make the dollars line up for them to want to make such a move.
Willing and capable buyers, willing and capable lenders.

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wahoowa
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Re: Are downtown apartment occupancy rapidly trending down?

Post by wahoowa »

well right, sure. i guess i was more curious whether selling is always more desirable than renting. i guess if you control the asking price and can influence the HOA assessments there's no reason it can't be.

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Re: Are downtown apartment occupancy rapidly trending down?

Post by flyingember »

wahoowa wrote:
Wed Dec 12, 2018 12:22 pm
well right, sure. i guess i was more curious whether selling is always more desirable than renting. i guess if you control the asking price and can influence the HOA assessments there's no reason it can't be.
Not always.

Owning and renting means you have collateral to use for other projects and cash coming in.

Cash only has more value when the cost of financing is more than the return from selling. If you sell the units you only have the return from the investment for this same purpose.

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taxi
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Re: Are downtown apartment occupancy rapidly trending down?

Post by taxi »

Peeps be like, gimme loan. Banks be like, Dodd-Frank.

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KCDowntown
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Re: Are downtown apartment occupancy rapidly trending down?

Post by KCDowntown »

The LCRA documents for the Muehlbach apartment/office/hotel project had some vacancy figures for some buildings downtown that I thought I'd pass along...

P&L Apartments - 291 units - 10.0% vacancy (29) - Opened 2016
531 Grand - 185 units - 4.3% vacancy (8) - Opened 2017
River Market West - 137 units - 3.7% vacancy (5) - Opened 2015
Apex on Quality Hill - 138 units - 29.7 vacancy (41) - Opened 2017
Sky on Main - 41 units - 9.8 vacancy (4) - Opened 2016

KCDowntown

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Re: Are downtown apartment occupancy rapidly trending down?

Post by tower »

KCDowntown wrote:
Thu Dec 13, 2018 4:53 pm
The LCRA documents for the Muehlbach apartment/office/hotel project had some vacancy figures for some buildings downtown that I thought I'd pass along...

P&L Apartments - 291 units - 10.0% vacancy (29) - Opened 2016
531 Grand - 185 units - 4.3% vacancy (8) - Opened 2017
River Market West - 137 units - 3.7% vacancy (5) - Opened 2015
Apex on Quality Hill - 138 units - 29.7 vacancy (41) - Opened 2017
Sky on Main - 41 units - 9.8 vacancy (4) - Opened 2016

KCDowntown
I think that those figures show that at this stage in the development of downtown KC, the location of the building matters a lot more than the developers think. Living in Quality Hill may as well be NKC or Rosedale, because you have to get in your car regardless since and travel time and parking cost is negligible. Only buildings right in the middle of the things have high enough demand to allow for premium rents.

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Re: Are downtown apartment occupancy rapidly trending down?

Post by flyingember »

It also shows that being next to the freeway isn’t limiting if the location and building is good. 531 Grand has better occupancy than Apex despite being much closer to one and apparently higher rates.

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normalthings
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Re: Are downtown apartment occupancy rapidly trending down?

Post by normalthings »

KC rental demand continues to significantly outpace construction.

https://www.berkadia.com/wp-content/upl ... y-3Q19.pdf

Image

Downtown occupancy rates continue to increase (wonderful news!). Interesting to see that occupancy rates are falling in 8 of 11 metro markets - still very high in most every submarket.

Image


Other facts: KC Metro has ~7,000 more rental units then STL Metro and higher average rents. KC Metro added 50% more units then STL did as well.


Median Incomes are rising quickly as well.

Image

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Re: Are downtown apartment occupancy rapidly trending down?

Post by kboish »

While i knew there was pent up demand, i have to admit it amazes me to see the demand stay strong after so much supply has come online. Especially in KC.

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Re: Are downtown apartment occupancy rapidly trending down?

Post by flyingember »

Pay is NOT rising quickly

Adjusting for inflation every year someone would be paid ~$67873 in 2019.

So the median income will buy just slightly less than in 2000.

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normalthings
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Re: Are downtown apartment occupancy rapidly trending down?

Post by normalthings »

flyingember wrote:
Fri Jan 24, 2020 9:22 am
Pay is NOT rising quickly

Adjusting for inflation every year someone would be paid ~$67873 in 2019.

So the median income will buy just slightly less than in 2000.
Projected growth from 2019 to 2023 looks like it will out pace inflation by quite a bit.

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KCDowntown
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Re: Are downtown apartment occupancy rapidly trending down?

Post by KCDowntown »

I'm not surprised occupancy is remaining strong - not that many units downtown have been added recently. I think the only downtown apartment project to complete in 2019 was The Gallerie and its 425 units.

2020 is going to have a lot more come online though:
  • RMW II, 116 units
  • City Club Apartments, 283
  • 2nd & Delaware, 276
  • Reverb, 134
  • Flashcube, 208
  • Artistry (possibly late 2020) ,341
  • Westside Flats, 33
That's almost 1,400 units.

KCDowntown

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beautyfromashes
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Re: Are downtown apartment occupancy rapidly trending down?

Post by beautyfromashes »

KCDowntown wrote:
Fri Jan 24, 2020 2:44 pm
I think the only downtown apartment project to complete in 2019 was The Gallerie.
Crossroads Westside?

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KCDowntown
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Re: Are downtown apartment occupancy rapidly trending down?

Post by KCDowntown »

beautyfromashes wrote:
Fri Jan 24, 2020 3:55 pm
Crossroads Westside?
It looks like this project had its grand opening on June 26th, 2018. Here's a link to a KCStar article the following day about it.

KCDowntown

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beautyfromashes
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Re: Are downtown apartment occupancy rapidly trending down?

Post by beautyfromashes »

KCDowntown wrote:
Fri Jan 24, 2020 4:05 pm
It looks like this project had its grand opening on June 26th, 2018.
Time flies.

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Re: Are downtown apartment occupancy rapidly trending down?

Post by flyingember »

Arterra was officially opened in early Jan 2019, but I seem to recall they occupied it before that.

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Re: Are downtown apartment occupancy rapidly trending down?

Post by bobbyhawks »

FWIW, the apartment complex (I think only 4 apartment building) on my street in the Westside North has never had to advertise a vacancy in my over 10 years of living here, but has had a "For Lease" sign up for a few months now. I don't think it says anything by itself, but it shows there is now competition where there wasn't as much before. One would hope it keeps rental prices in check for our region.

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normalthings
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Re: Are downtown apartment occupancy rapidly trending down?

Post by normalthings »

Metro occupancy down to 94.3% (2015 rate). Rent collection rates are unchanged from last year (good sign). Concessions being offered to renters have seen no major upticks and are actually down across the board from the past winter according to AREA.

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